Updated: Apr 26, 2022
In Commercial Lending, bankers from around the world use the 6 Cs of commercial mortgage lending to help in determining the eligibility of commercial loan application packages. Some non-bank lenders, private lenders, venture capitalists and hard money lenders may also refer to the 6 C's as well. Therefore, make sure you have your presentation fully ready when you go to apply for a loan.
The 6 C's of commercial lending are:
Company’s capitalization, reserves, statement, net worth, etc.
Borrowers should demonstrate the ability to repay the loan.
Borrowers should show a debt-service-coverage ratio of at least 1.30 and above
Borrower's character, integrity and professionalism. Condition:
Business analysis and valuation, as well as a feasibility study of competition and the marketplace.
Borrowers should provide a strong collateral consideration and other securities.